Monday, March 27, 2006

why the garden club couldn't save youngstown (part I)

About a year ago, I stumbled upon a research paper by Sean Safford, then a graduate student at the Massachusetts Institute of Technology. The paper is an outgrowth of his PhD dissertation titled "Why the Garden Club Couldn't Save Youngstown" and presents some theories on the diverging paths of Allentown, Pennsylvania and Youngstown since the time both cities had their major industrial breakdowns in the 1970s. The pdf can be accessed here, at the website of the Local Innovation Systems Project, a part of the MIT Industrial Performance Center.

Why were Youngstown and Allentown selected? Safford created a statistical model where the dependent variable was the change in the regions' average wage over the decades. After looking at 38 other midwestern regions with less than 10 million people, the two regions were extreme outliers - that is, the Allentown region had relatively high per capita growth, and Youngstown region had much lower growth when compared to other regions of the country.

One fascinating and deeply revealing figure (below) illustrates the change over time for the regions' average wages adjusted for inflation by the regional consumer price index. In 1969, Youngstown's average wage was greater than both the nation and Allentown, but today is lower than both Allentown and the nation as a whole. Just as dramatic is the stagnant average wage in the Youngstown region, essentially flatlining between 1995 and 2001, at a level comparable to the average wage in 1975. Wow. The Allentown region's average wage climbed dramatically over this same period, eclipsing the national average in the mid 1980s.

Another chart (below) from the paper showed the importance of certain traditional fields of manufacturing within the areas in the past thirty years. The Youngstown region has maintained production in traditional sectors such as automobiles and steel, where Allentown's metropolitan area shifted to chemicals, electronics, and other emerging industries.

Safford describes in his paper what historic decisions created this divergence, and provides an interesting theory based on the strength of social networks why these specific decisions were developed.

This paper is a fascinating account about the progession of the Youngstown region's economy since the demise of the steel industry, and offers new perspectives on the necessity of social institutions within a community. In fact, there is so much interesting information in this paper, I'm going to dedicate the next two blogs to its contents.

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